Nokia has downgraded its sales forecast for the second quarter. The announcement caused the company's stock to tumble -- down as much as 13% -- underlines how much is at stake as Nokia readies to release its smartphone on Microsoft's Windows Phone 7 platform.
Nokia issued a statement Tuesday morning saying "multiple factors are negatively affecting its sales, including competition from Google's Android and Apple, especially in China and Europe."
Nokia also said it was feeling the pinch from lower prices for devices and lower sales volumes.
Nokia said it expects its second-quarter net sales of devices and services to be "substantially below" its previously projected range of $8.8 billion to $9.5 billion.
In the same statement, Nokia said it was pleased with its progress on its Windows Phone strategy, and has "increased confidence" that it will "ship the first Nokia device with Windows Phone in the fourth quarter of this year."
In response, Nokia joined forces with Microsoft in February. Nokia plans to make Microsoft's Windows Phone 7, a.k.a. Mango, its primary smartphone platform. In the meantime, smartphones running Symbian are increasingly unpopular. The close ties between the companies sparked rumors of a takeover in mid-May, but Nokia has denied such a plan is in place.